Let's Learn From Warren Buffet ^^

Day Trading Comic

well its the very first japan comic that i come over with that mix romance and stock trading in the story.

so if anyone interested in reading it just go to here http://mangafox.me/manga/billionaire_girl/

Stock To Watch - [7237]PWROOT

Stock Code:(7237) PWROOT
Company Name: Power Root (M) Sdn Bhd
Website:http://www.powerroot.com
Board: Main Market
Sector: Consumer
Core Product: Oligo Coco, Ali Cafe, Ah Huat White Coffe, Kacip Fatimah
My Summary:

a company that sells coffe and chocolate drink aka Nestle or Dutchlady wannabe, well in my opinion why not since 2 of the company is giant in our bursa malaysia rite mate =)

i've done some research on this company fundamental this is a worthy company to buy and keep although the price now is still low its currently trading at around RM 1.85- RM 1.90

I manage to grab alot of this stock when it hit rock bottom at RM 1.77 below are the info of the company. The other reason i think its a good investment because it company not only selling his coffe in malaysia but to overseas such as china, vietnam and much more. thats why in my opinion this company has a great potential of increasing there revenue each year.

Company Info:-
POWER ROOT (M) SDN. BHD. was founded on 23 July 1999 in Johor Bahru, Johor. It is a leading company to develop and promote herbal energy drinks fortified with two main rainforest herbs: Eurycoma longifolia Jack or commonly known as "Tongkat Ali" and Labisia Pumilia and Pathoina or "Kacip Fatimah". These herbs are indigenous to Malaysia and its properties for promoting physical well-being are highly regarded by Malaysians. POWER ROOT (M) SDN. BHD. is now a subsidiary of a public listed company: POWER ROOT BERHAD (formerly known as Natural Bio Resources Berhad), a company listed on the Main Market of Bursa Malaysia Securities Berhad. With the determination to promote these local products in the international markets, Power Root has invested heavily in research and development of these traditional herbs to create its own brand of products. In March 2001, Power Root established a marketing branch in Kuala Lumpur to better coordinate its logistic and serve its customers more effectively. In 2003, Power Root started its very own manufacturing plant in Johor Bahru to cater for growing demands. An 18-acre phase 1 manufacturing facility is expected to be completed early 2008, incorporating modern production technology to cater for the strong market demand locally, business development opportunities abroad and new formulations development. Power Root with its entrepreneur spirit, is committed to provide consumers with the ultimate choice of a high quality product. Concentrated efforts in research and development to develop new and improve existing products have also accelerated its success in the market. As such, the company was able to quickly establish a stable business foundation and thus, creates a very promising future for the company

                                                           
                                Below are the financial performance for power root
                                    (Image provided from http://klse.i3investor.com)

(click to picture to enlarge)

Revenue:-
As you can see the company performance in this 5 year is very good its profit to share holder is increasing every year.

Dividend:-
The dividend payout is quite generous if you ask me and it pays 8 cents  for every share you own. it Pays dividend 2 times a year.(Warren Buffet like stock that pay dividend)

ROE%:-
for ROE% its above 15% now means is a good things and in my opinion it will keep increase in the future (Warren Buffet like to buy into a company that have at least 15% and above means is a good sign)

Current Ratio:- 2.76 (Strong)
Acid Test Ratio:- 2.05 (Strong)
Debt Equity Ratio:- 0.39 (Strong)

(Note:- All the info provided above is an opinion. We will not be responsible for any losses, so buy at your own risk.)

Story Sharing - No One Cares More Then Yourself

I have a friend name Esther that work as a piano teacher. One day she told me she invest a large sum of money in mutual fund for quite some time.

I ask her, why do you put so much money in the mutual fund ?

she reply me that the mutual fund agent told him that there fund will surely profit and show him some so call facts how good there fund have perform.

1 year pass by and i ask her hows the fund is performing ? 

She replied to me with a angry voice that the fund manager cheated her hard earned savings. The fund keep on dropping and i lost alot of money when i told the agent i wanted to sell he told me your funds now can only return you this xxx amount. when i ask him why only so little left ? the agent scold me and say of coz what do you think we bank doesn't need to charge fee ? 

So in the end Esther was very upset because the agent did not told him about those hidden fee.

Moral of the story: The world out there is full of so call money making scheme or program that's why as a smart investor we need to be careful to not let other people take care of our money. The problem does not lies with other people but ourself. Esther did not do his research before jumping in a invesment and blame the agent cheated on her.

Thats why my father always tell me why be lazy and let other people invest your money when you can do it your own. In this world there is no free lunch son...

Story Sharing - Chimpanzee Vs Fund Manager

There was a test conducted in the United States where they asked a blindfolded chimpanzee to pick some stocks by thorwing darts at the Wall Street Journal (newspaper). 

The performance of these stock later compared with that of some reputable fund managers.

The result?

Some of the fund managers couldn't even beat the chimp!

Moral of the story: This test was conducted in the United States to prove the theory of random walk, which is associated with efficient market hypotesis. The logic behind this is that any stock price is truly reflective of the information avaible in the market. Tomorrow's price change will be reflected by tomorrow's news and will be independent of the prices changes today. Hence, price changes are unpredictable and random.

However, as you gain more knowledge, you'll realize that our stock market is not fully efficient yet, Hard work does pay off well in the stock market.

Legends - Jesse Livermore

• NAME: Jesse Lauriston Livermore
• OCCUPATION: Stock Trader, Stock Speculator
• BIRTH DATE: July 26, 1877 / Died: Nov 28 1940
• PLACE OF BIRTH: Shrewsbury, Massachusetts

Personal Profile

In his early teens, Livermore left home to escape a life of farming. He went to Boston and started his long career in stock trading by posting stock quotes for the Paine Webber brokerage firm. 

He then began trading for himself and by the age of fifteen, he had reportedly produced gains of over $1,000, which was big money in those days. Over the next several years, he made money betting against the so-called "bucket shops," which didn't handle legitimate trades – customers bet against the house on stock price movements.

He did so well that he was banned from all of the shops in Boston, which prompted his move, at age 20, to New York where his speculative trading successes - and failures - made him a celebrity on Wall Street and around the world. His financial ups and downs finally ended tragically with his suicide death at the age of 63. 

Investment StyleJesse Livermore had no formal education or stock trading experience. He was a self-made man who learned from his winners as well as his losers. It was these successes and failures that helped cement trading ideas that can still be found throughout the market today.

Some of the major principles that he employed include:

• Money is not made in day trading on price fluctuations. Livermore emphasized the importance of focusing on markets as a whole, rather than on individual stocks. He noted that greater success comes from determining the direction of the overall market than attempting to pick the direction of an individual stock without concern for market direction.
• Adopt a buy-and-hold strategy in a bull market and sell when it loses momentum.Livermore always had an exit strategy in place. (To learn more, see A Look At Exit Strategies.)
• Study the fundamentals of a company, the market and the economy. Livermoreseparated successful investors from unsuccessful investors by the level of effort they put into investing.
• Investors who focus on the short term eventually lose their capital.
• Ignore insider information; make your own independent analysis. Livermore was very careful about where he got his information and recommended using multiple sources. (For more insight, see Can Insiders Help You Make Better Trades? and When Insiders Buy, Should Investors Join Them?)
• Embrace change in adapting investing strategies to evolving market conditions.

Legends - Benjamin Graham

• 
  
• NAME: Ben Graham
• OCCUPATION: Professional investor
• BIRTH DATE: May 8, 1894 /  Died: 1976
• EDUCATION: Columbia University
• PLACE OF BIRTH: London
• NICKNAME: "Father Of Value Investing"

Early Life

Benjamin Graham was born in London in 1894. (His original name was Grossbaum, but he changed it as a young man, the better to fit into the Wall Street environment.) 

His parents moved to New York City when he was one year old.  Graham was a brilliant student and won a scholarship to Columbia University. In 1914, he graduated second in his class, at age 20, and was invited to teach at the school.  But he refused.  His father had died, the family was poor, and Graham needed a larger income to support the family. 

So he went to Wall Street and worked for the firm of Newburger, Henderson and Loeb for $12 per week. 

His early duties included being a runner, delivering securities and checks, writing descriptions of bond issues, and later writing the daily market letter of the firm. Before long, he began to analyze companies, and at the age of 26 he was promoted to full partner. 

In 1923, he left to set up his own partnership, and in 1928 he began teaching investment classes at Columbia. Over time, working with former student David Dodd, the lessons of his classes were gathered into his first book, titled "Security Analysis," which was published in 1934. 

The book has sold over a million copies.  Warren Buffet says he's read it at least four times. I've only read mine once (it's the second edition, published in 1940, with 851 pages), but it remains a valuable reference. You can buy a fancy new leather-bound sixth edition on Amazon for $132. Or you can get a used one for $31. Or buy the Kindle electronic version for $42.53. 

Or, you could simply read Graham's second book, the more user-friendly "The Intelligent Investor," which was published in 1949 and is less than half the size of its predecessor. 

I recommend them both. 

In 1950, a fellow named Warren Buffett enrolled in graduate school at Columbia to study under Graham, and he learned well. In fact, Buffett has often said that after his father, Benjamin Graham was the most important influence in his life. 

Benjamin Graham passed away in 1976 at the age of 82. 

So what is it that made Graham's work so special? 

In short, he systematized the entire process of evaluating companies, all with the goal of finding low-risk (or no-risk) investments that would reward over the long run. 

Graham liked to analyze--and quantify--a business according to six factors. 

1. Profitability 
2. Stability 
3. Growth in earnings 
4. Financial position 
5. Dividends 
6. Price history 

More precisely, he required that a potential investment have the following: 

1. An earnings-to-price yield at least twice the AAA bond yield. 

2. A P/E ratio less than 40% of the highest P/E ratio the stock had over 
the previous five years. 

3. A dividend yield of at least two-thirds the AAA bond yield. 

4. A stock price below two-thirds of tangible book value per share. 

5. A stock price below two-thirds of "net current asset value." 

6. Total debt less than book value. 

7. Current ratio greater than two. 

8. Total debt less than twice "net current assets." 

9. Annual earnings growth in the prior 10 years of at least 7% annual compounded. 

10. No more than two declines of 5% or more in year-end earnings in the prior 10 years are permissible. 

And this was all in the days before calculators! Granted, Graham was a whiz with a slide rule, and no doubt he did a lot of the calculations in his head. Nevertheless, that's a lot of work. 

Happily, there's a way to get the results of Ben Graham without all the work, because on our Cabot staff we have a man by the name of Roy Ward, who studied under another of Graham's students, Dr. Wilson Payne. Roy Ward and Wilson Payne collaborated in 1969 to turn Graham's formulas into computer code. And Roy has been using the system ever since, in both his professional and private investing. 

Every month, Roy tracks 44 separate items that size up thousands of companies using four sets of factors, QUALITY, VALUE, GROWTH and TECHNICAL. 

QUALITY encompasses measures like Current Ratio, Earnings Stability and Price Growth Stability. 

VALUE tracks items like P/E ratio, Historical Price/Book Value relative to Current Price/Book Value, and Historical Price/Dividend ratio versus Current Price/Dividend Ratio. 

GROWTH looks at things like five- and 10-year historical revenue growth trends, Quarterly Earnings Acceleration and five-year projected cash flow. 

TECHNICAL measures things like Relative Strength, Price Stability and Industry Strength.